Tvl.Gopra Traders vs. The Comissioner Of Commercial

Held

The Court held that the impugned assessment orders dated 23.05.2018 and 05.09.2018, passed by the second respondent, were liable to be quashed. The Court found that the petitioner had indeed replied to the notice dated 07.05.2018, and this reply was acknowledged by the respondents. The assessment order incorrectly stated that no reply was received. Crucially, the Court noted that no personal hearing was granted to the petitioner, which is a violation of the settled law that sufficient opportunity must be given to the assessee before passing an assessment order under Section 27 of the TN VAT Act, 2006. The reasoning was that the respondents failed to consider the petitioner's objections and did not provide a fair opportunity to be heard. The ratio decidendi is that assessment orders passed without considering the assessee's reply and without granting a personal hearing are unsustainable. The Court quashed the impugned proceedings and remanded the matter back to the respondents for fresh consideration, directing them to pass final orders after giving sufficient opportunity, including a personal hearing, within eight weeks.

Facts

The petitioner, Tvl.Gopra Traders, a registered dealer under the TN VAT Act 2006, availed the compound assessment scheme under Section 3(4) of the Act. This scheme required the petitioner to pay 0.5% on total taxable sales, without collecting tax on sales/purchases or availing input tax credit. The petitioner received a notice dated 07.05.2018 from the respondent, the State Tax Officer, alleging collection of tax on purchases in violation of Section 3(4). The petitioner replied on 12.05.2018, denying the allegation and requesting sales details. The respondents issued impugned assessment orders dated 23.05.2018 and 05.09.2018 for the tax periods 2014-15 and 2015-16, respectively. The petitioner contended that these orders failed to consider their reply and did not grant a personal hearing.

Key Issues

1. Whether the impugned assessment orders passed by the second respondent, the State Tax Officer, for the tax periods 2014-15 and 2015-16 are liable to be quashed for non-consideration of the petitioner's reply and denial of personal hearing, contrary to the principles of natural justice and Section 27 of the TN VAT Act, 2006? Petitioner's arguments: The petitioner argued that they had duly replied to the show cause notice dated 07.05.2018 on 12.05.2018, which was acknowledged by the respondents. They denied collecting tax on purchases in violation of the compounding scheme. Despite this reply, the impugned assessment order dated 23.05.2018 erroneously stated that no reply was received. Furthermore, no personal hearing was granted to the petitioner to present their objections. The petitioner also sent a subsequent letter on 18.06.2018 requesting correction, which was also ignored. Respondents' arguments: The judgment does not record any specific arguments made by the respondents.